How to Travel Iceland on a Budget: Tips for Affordable Adventures
Iceland is a dream destination for many travellers, known for its otherworldly landscapes, stunning natural wonders, and unique experiences. However, it also has a reputation for being expensive. So is it possible to travel to Iceland on a budget?
But the good news is that with some smart planning and budget-savvy strategies, you can experience the magic of Iceland without breaking the bank. At Skyhook, we want to see you travel to your dream destinations, even on tight budgets. That's why we've created this guide to affordable adventures in the Land of Fire and Ice.
In this article, we'll help you plan a trip to Iceland on a budget. Let's get into it!
How Much Do I need to Budget to go to Iceland?
On average, expect to spend $300 -$ 350 per person per day on accommodation, meals, and activities.
Compared to other European destinations, this is indeed on the pricey side. For example, a hostel dorm bed costs around 8,000 ($58), a basic room for two is 27,000 - 31,000kr ($195 - $225) and a meal for two can range from 7,000 - 24,000kr ($50 - $147). Even simple expenses like a coffee ($4) or a public transport ticket in Reykjavík (around $5) can contribute to your overall spending.
Tips For Travelling To Iceland On Budget
1. Timing is Everything
One of the easiest ways to save money on your Iceland trip is to visit during the off-season. Peak tourist season runs from June through August, when prices for flights, accommodation, and car rentals are at their highest.
Consider visiting in the "shoulder season" months of May or September for milder weather and lower prices. Or brave the winter months (October through April), which are the cheapest time to travel to Iceland and the best time to travel to Iceland for Northern Lights.
However, winter travel has some challenges, such as shorter daylight hours, the potential for harsh weather, and some attractions being closed. Despite these challenges, you'll be rewarded with dramatically lower costs across the board.
Pro tip: Be prepared with proper winter gear and a flexible itinerary to make the most of your trip.
Getting around Iceland can consume a big chunk of your budget if you're not careful. Travellers often report spending more than kr4,249 ($31) per day on local travel.
If you're travelling on a budget, finding ways to lower your local travel expenses is crucial.
Here are some effective strategies:
Rent a campervan (around kr14,000 - kr60,000 or $102 - $435 per day during the peak season): This combines your transportation and accommodation, saving you money overall. Be aware that wild camping is illegal in Iceland - you must stay at designated campsites.
Opt for a smaller, fuel-efficient car (costs around $32 per day for a compact car): Unless you plan to tackle F-roads in the highlands, a compact car will suit most visitors just fine and save on rental and fuel costs.
Use public transportation: While more limited than in many European countries, buses connect major towns and attractions. The public bus system, Strætó, is a budget-friendly option for getting between cities.
Consider hitchhiking: Iceland is one of the safest countries in the world for hitchhiking. Just be prepared for long waits in less populated areas.
3. Iceland Affordable Accommodation
Finding a place to stay in Iceland doesn't have to break the bank. Here are some budget-friendly options that let you save money while still enjoying the comfort and local charm:
Camping
Camping is the most budget-friendly option, costing around 1,500 - 3,000kr ($12 - $20) per night. Most campsites in Iceland come with basic amenities like showers and cooking areas, allowing you to enjoy the great outdoors conveniently.
While wild camping is prohibited, you'll find plenty of official campsites nationwide. These spots can get busy during the summer, so booking ahead is wise.
Hostels
Hostels are ideal for budget travellers seeking a bit more comfort. Dorm beds typically cost $25+ per night, and many hostels offer private rooms (starting at $55) if you prefer more privacy. They're also great places to meet fellow adventurers.
Guesthouses and Farmstays
For a more authentic Icelandic experience, consider staying in a guesthouse or on a farm. These accommodations often cost less than hotels, ranging from $109 - $284 per night, and provide a glimpse into local life.
Farmstays, in particular, offer a unique chance to experience Iceland's rural charm.
Get the genuine experience
Discover once in a lifetime adventures, made possible by local guides.
Perfect for groups or longer stays, these options can be more cost-effective than hotels. Rates range between $140 - $400 for houses and $91 - $735 for villas.
Note, though, that the prices change based on the size of the rental and the location. In most cases, rentals in the capital city (Reykjavík) will be the most expensive, while those in remote regions like Breiðdalsvík will be a lot cheaper.
Couchsurfing
If you're up for meeting new people, Couchsurfing is a great way to stay for free. It's not for everyone but offers a unique opportunity to connect with locals.
Travel Points and Miles
Use those credit card points! Look for package deals that combine flights and hotels to score some serious savings.
Prices for three or four-star hotels range from 6,500–110,000kr per night, with most establishments offering free Wi-Fi. Breakfast is generally available but not always included.
Complete Vacation Packages
Booking a complete vacation package can also save you money. These packages often combine accommodation, transportation, and breakfast with exciting tours and activities, allowing you to manage your budget more effectively.
You can book any of our trips at Skyhook for the best bang for your back. Here are our offers:
Dining in Iceland can be pricey, with restaurant dinners costing around kr5900 ($45) - up to $100 if you're fine dining. However, you can still enjoy delicious local cuisine without breaking the bank by following these tips:
Cook Your Meals: Look for accommodations with kitchen access, allowing you to shop at budget grocery stores like Bónus or Krónan. Preparing your meals is one of the best ways to save money.
Pack Snacks and Picnic Supplies: Stock up on simple yet satisfying foods like bread, cheese, and fruit. This strategy saves money and allows for spontaneous picnics amidst Iceland's stunning landscapes.
Try the Famous Hot Dogs: Iceland's hot dogs are a must-try. They're tasty, filling, and one of the most affordable meals you'll find.
Seek Out Lunch Specials: Many restaurants offer more budget-friendly menus at lunchtime. This allows you to enjoy local cuisine at a fraction of the dinner prices.
Limit Alcohol Consumption: Drinks can be costly in Iceland. If you do want to indulge, buy from state-run alcohol shops rather than bars.
Bring a Reusable Water Bottle: Icelandic tap water is some of the purest in the world. There's no need to spend money on bottled water.
5. Free and Low-Cost Activities in Iceland
Iceland's most spectacular attractions are often free to visit. Plan your best Iceland vacation ideas like chasing waterfalls - including Seljalandsfoss, Skógafoss, and Dettifoss, which are accessible without spending a dime.
Hiking in Iceland offers another budget-friendly way to explore. Popular trails include Glymur Waterfall, Reykjadalur Hot Springs, and Þingvellir National Park.
If you need a relaxing break, visit local geothermal pools instead of the pricey Blue Lagoon. These pools are cheaper and provide an authentic Icelandic experience.
You can also join free walking tours in cities to learn about local history, and take advantage of free admission days at Reykjavík's museums. If whale watching is on your list, you might spot them from coastal viewpoints for free.
Money-Saving Tips and Tricks
Here are some additional ways to stretch your budget in Iceland:
Get a Reykjavík City Card: If spending time in the capital, this card offers free entry to many attractions and museums and free public transportation.
Take advantage of happy hours: If you do want to enjoy a drink out, many bars offer significant discounts during happy hour.
Use credit cards with no foreign transaction fees: Cash is rarely needed in Iceland, and using a card with no fees will save you money on every purchase.
Book activities in advance: Many tours and activities offer early booking discounts.
Avoid buying bottled water: Bring a reusable bottle and fill it with Iceland's excellent tap water.
Skip souvenirs: Take photos instead of buying trinkets. Look for local flea markets or second-hand shops if you want a memento.
The Ísafjörður Bay
Conclusion
That's a wrap on your budget-friendly guide to Iceland! With the best times to visit, smart transportation choices, and tips for cheap eats and unforgettable experiences, you're ready to embark on an Icelandic adventure without splurging.
So go ahead and embrace the stunning landscapes, chase the Northern Lights, and enjoy every moment of your trip to Iceland. Here's to incredible experiences and amazing savings!
